New Specialty Metals Rules for DFARS Compliance

1. New Specialty Metals Rules for DFARS Compliance • Compliance methods under FY 08 law: • Use only US or qualifying country specialty metals • Make/Sell COTS fasteners for COTS items • Make commercial fasteners AND certify purchase 50% domestic metals per year • Distributors would have to obtain self-certification from manufacturers • See www.indfast.org for list of manufacturers and distributors utilizing 50% provision and find out how to be listed – must renew self-certification on an annual basis • Sell fasteners under contract issued before 7/26/08 using fastener DNAD - the fastener DNAD expires for use on new contracts on 7/26/08

2. New Specialty Metals Rules (cont.) • Utilize Prime Contractor’s one-time waivers (product made before 10/17/06; item accepted by Govt before 9/30/10) • Any combination • www.dcma.mil/dnad - website with all current rules (DoD Class Deviation), contract language, etc. • Proposed Rule Public Comment Period Closed September 19, 2008 • Final rule expected with few, if any, changes in Spring 2009

3. New Specialty Metals Rules (cont.) • Summary • Fastener manufacturers and distributors have substantial flexibility under new law, but you must be proactive • Understand your options • Communicate clearly with your customers